SAP SE is hoping for faster cloud revenue growth following customer requests to add artificial intelligence.
In January, the company created a new position, head of artificial intelligence, to oversee the technology across its services. Philipp Herzig was appointed to the position, with CEO Christian Klein saying he had given him the task of “strategic business,” as he put it in an interview.
“A critical element of our strategy is to pursue the highest speed in our work,” Herzig said.
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While SAP took time to move customers to the cloud, it is now experiencing significant growth and is looking to use AI services to accelerate user migration. SAP’s business AI offerings are only available to cloud customers, and Klein said last year that the company could not afford to allow on-premises users to leverage the technology.
Herzig said more than 24,000 SAP customers have adopted its AI tools, with less than 1 percent maintaining on-premises systems. Deploying AI services “out-of-the-box” for cloud users is becoming easier and may not require retraining, he added.
“Of course, when it comes to artificial intelligence and how to train these models, these are issues that need to take place in the cloud,” said Jens Hungershausen, president of DSAG, an interest group representing more than 3,800 SAP customers in Germany, Austria and Switzerland.
Rather than scaling language models at scale, SAP is focusing on its strategy of backing hot AI startups and partnering with leading cloud providers like Amazon and Google. It is focusing on finding AI applications that can integrate with its own expertise, investing in startups like Aleph Alpha, Anthropic and Cohere.
“We chose these last year because of the remarkably interesting technologies they offered for the range of AI that was needed,” Herzig said. “Often people only look at them from the perspective of the big language model, without knowing the full context behind it.”
The company plans to invest over $1 billion in AI over the next two years. It is a rare European beneficiary of the stock . This company is the most valuable in the German benchmark DAX, having already made gains of over 27% year to date. This happened after announcing a restructuring plan, with a focus on AI.
“SAP can benefit significantly from investments in AI by companies, as it has a large repository of business transactional data,” Bloomberg Intelligence analyst Anurag Rana said in January.
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The focus on artificial intelligence has led to some job losses. The company announced during its full-year results presentation in January that the restructuring would affect 8,000 jobs.
“We are also implementing AI internally,” Christian Klein previously told Bloomberg TV. “The important thing is to acquire new skills and make sure SAP becomes more productive.”.
Source: bnnbloomberg
